Mexico’s Peña Nieto Talks to TIME: ‘We Can Move Beyond the Drug War’

In a wide-ranging interview, Mexico's President-elect lays out a vision for curbing narco-violence, unleashing economic growth, reforming his once dictatorial party and regaining his country's international stature.

Enrique Peña Nieto takes office tomorrow, Dec. 1, as the next President of Mexico—whose young and otherwise successful democracy is beset by narco-bloodshed (60,000 murders in the past six years), an underachieving economy (average annual growth of only 2% since 2000) and a feeling that its Latin American leadership role has been eclipsed by its fast-developing South American rival, Brazil. Peña, 46, the popular former governor of central Mexico state, convinced Mexican voters that his Institutional Revolutionary Party (PRI), which ruled Mexico from 1929 to 2000 as a corrupt, one-party dictatorship, has righted itself enough to right Mexico. (Read TIME International’s cover story on Peña, available to subscribers.) He spoke with TIME’s Latin America bureau chief, Tim Padgett, and Mexico reporter Dolly Mascareñas at his transition headquarters in Mexico City. Excerpts (translated from Spanish):

TIME: Your presidency marks a critical moment for Mexico. What are the most important things you have to do to lift it out of its hole of drug violence and anemic economic growth?

PEÑA NIETO: I’m feeling a renewed sense of hope and optimism about what we can do in the coming years. First, restore peace and tranquility in Mexico, which means altering our public security strategy: more effective law enforcement coordination, stronger judicial institutions. Second, reduce poverty and inequality. Some 52 million Mexicans live in poverty, and we’ve got to seek innovative solutions that not only give them aid but link them to productive activity. The socio-economic contrasts that persist [here] are unacceptable. Third, revive economic growth. We’ve built more favorable macroeconomic conditions in Mexico, but we have to promote more competition and raise our levels of [bank] credit, build up our development banks.

In your 2010 book, Mexico: The Great Hope, you criticize Mexico’s “ineffective state.” How will you make it more effective—you won only 38% of the presidential vote and the PRI was denied a congressional majority—especially when it comes to corruption, which costs Mexico almost a tenth of its trillion-dollar gross domestic product each year?

Mexico has proven by now that it’s a strong electoral democracy. Now we have to build a democracy that produces better results; if not, then you get a democracy of disenchantment. That means combating the social cancer of corruption. So I’m proposing an autonomous federal institute to ensure more transparency in public records, and an autonomous anti-corruption commission that would be part of Mexico’s Constitution.

Given the strength of the U.S. Latino vote in President Barack Obama’s re-election this month, this a favorable moment for immigration reform. What are your expectations for bilateral relations, not just on immigration but the drug war and trade agreements like the Trans-Pacific Partnership (TPP)?

I see a lot of opportunity right now. I think we can start moving beyond what is sometimes a monothematic relationship due to the [drug war] issue. We can start focusing on prosperity issues again, like better integrating our economies so we can present a more powerful regional block to the world. The TPP is a great opportunity in that regard. I believe immigration reform is a commitment of President Obama’s government, especially now that it gives him a chance to respond to the great demand expressed by U.S. Hispanic voters for establishing better mechanisms for [cross-border] mobility.

About the drug war, how do the marijuana legalization measures voters just approved in Colorado and Washington complicate drug interdiction for Mexico?

Without a doubt, it opens space for a rethinking of our policy. It opens a debate about the course the drug war should be taking. It doesn’t necessarily mean the Mexican government is suddenly going to change what it’s doing now. But [state legalization] creates certain distortions and incongruences since it’s conflict with [U.S.] federal [law], and that will have an impact on how Mexico and other countries in the hemisphere respond. Personally, I’m against legalization; I don’t think it’s the [right] route. But I am in favor of a hemispheric debate on the effectiveness of the drug-war route we’re on now.

To reduce Mexico’s awful narco-violence, you’ve proposed a national “gendarmerie” and you’re putting the troubled federal police—15 of whose members are under arrest for allegedly being in the pay of drug cartels and ambushing two U.S. C.I.A. agents—under tighter control. But can you really cut the number of Mexico’s homicides by half, as you’ve pledged—and can you assure people that the PRI won’t go soft on drug traffickers?

Cases like the one you mention make it obvious that Mexico needs a much more coordinated and professional judicial power, especially law enforcement and prosecution that makes more effective use of criminal intelligence. Only two of every 100 violent crimes in Mexico result in convictions. There will be no truce or deals with organized crime or drug trafficking; there will be a full assault. But preventing violence and promoting economic and social development are part of a vicious cycle. Without better economic opportunity you can’t have better public security, and vice versa.

You recently got the PRI to push through a major labor reform law, but your plan to allow private investment in Mexico’s state-owned oil industry for the first time in 75 years may be more important.

This is a big energy reform that will require a constitutional amendment. It’s a sensitive national issue for Mexicans, but I think in modern times, if we’re going to realize our energy potential, we have to expand capacity and infrastructure, and that means letting the private sector in. Not privatization but private participation. Brazil is a good example, so is Colombia. On the labor reform, President [Felipe] Calderón and I saw an opportunity to create a more modern framework. I think [its passage] signals more maturity among the political parties, more of an agreement-seeking attitude.

But can Mexico produce meaningful economic growth if you don’t reduce its suffocating business monopolies, especially in sectors like telecommunications and building materials?

I am pushing legislation to strengthen the government’s monopoly-busting organs. One of the most important parts of the bill is appeals reform, to prevent monopolies from being able to resort to the constant, endless litigation they use to avoid paying fines and sanctions. You’ll see, I’m committed to confronting and combating monopolistic practices, because the only way to realize the economic opportunity I’ve been talking about is greater competition, lower prices, better products.

The PRI is criticized for having aided monopolies. You say you’re the party’s new face, but critics charge you’re manipulated by its old guard. Has the PRI modernized itself seriously enough to modernize Mexico?

Yes. To get elected in Mexico today you have to compete like any democracy, and you don’t do that by being manipulated. The big challenge now for me and my party is to produce results. If we don’t, we can’t compete. Whatever people may think of it, in its 83 years my party has also proven it can produce results, that it can meet the demands of the time.

Many who know you say your best quality is your ability to listen, that you’re a dialoguista who knows how to negotiate and compromise, which Mexico admittedly could use more of today. Where does that come from?

I genuinely enjoy being among people. I’m not a politician who likes to read the people from a distance; you can’t take [their] temperature that way. I play golf, I love Mexican food—it’s one of the few cuisines in the world that can match France’s, and UNESCO backs me up on that.

We agree. But while mole poblano does rival coq au vin, you’ve lamented Mexico’s reduced regional and international leadership role. How will you regain it?

Mexico got distracted, in part by its security crisis, in part by its deepening relationship with the U.S. I think we’ve learned that our international leadership depends a lot on our internal circumstances. Today, look at Brazil; it’s been an economic growth engine. We have to have better social development, public security, economic growth. In the past, Mexico has traditionally been out front promoting things like regional peace initiatives and free trade, and when we improve our development at home we’ll project ourselves more strongly outside Mexico again.

"Enrique Peña Nieto takes office tomorrow, Dec. 1, as the next President of Mexico—whose young and otherwise successful democracy is beset by ..."

Apparently "successful" means some form of democracy still exists. Okay, that's one way of looking at it, although you have to wonder what would have happened if Mexican elites hadn't for decades been able to ship millions of its poor across its northern border. Without that 'safety valve' maybe Mexico would have been forced to solve more of its own problems, and ours would be less severe.

Mexico's gruesome civil war is clearly a product of the failed policy of Prohibition.Alcohol Prohibition was a tremendous failure due to the incredible amount of crime and disorder it created. Human nature hasn't changed since the 1920s, when the distribution of liquor was turned over to a whole new group of criminal entrepreneurs. Drug Prohibition has turned Mexico into a civil war zone. Dangerous mind altering substances are again being manufactured, smuggled, and sold by criminals. Our intentions in prohibiting these substances may well be good but the result of our inability to recognize the futility of such an action will both deepen and prolong the agony caused by this extremely counter-productive and dangerous policy.

The future depends on whether or not enough of us are willing to take a long look at the tragic results of prohibition. If we continue to skirt the primary issue while refusing to address the root problem then we can expect no other result than a worsening of the current dire situation. Good intentions, wishful thinking and pseudoscience are no match for the immutable realities of human nature.

@MalcolmKyleProhibition has nothing to do with the gruesome death toll, the killings are the result of greed for money and power to control distribution. I do agree that prohibition is dumb and should be vanished; legalization of recreational drugs will open new ways of revenue for the states and put a stop to most criminal activities. In Mexico all the killings and kidnappings are part of the struggle for power between several cartels in Mexico, most of the people that have been kidnapped and kill are criminals, rarely cartels target civilians. Legalization of recreational drugs is the path to a more civilized society, pretty much like cigarettes; nobody is holding a gun to my head and ordering to smoke, I choose not to; I believe the same thing will happen with this other drugs.

Everybody in Mexico knows that former President Carlos Salinas de Gortari is running the show behind the scenes pretty much in a Putin fashion (as in the Russian forever President), and when the most intelligent and most corrupt and most hated President in Mexico's history is involved nothing good will come out of that. There is a book from a well respected journalist (whose son runs the morning tv news for Televisa) that has evidence that the biggest drug dealer in the world (Guzman Loera aka "El Chapo" Guzman) held a long conversation with Pena Nieto before the elections, possibly to make a pact with his Government. Here is a guy (Pena Nieto) who "wrote" a book and yet doesn't read, a guy who doesn't even speak average English and who has benefited from his father's connections to the most corrupt line inside the PRI (Institutional Revolutionary Party). These are dark times for Mexico, these guys are here to stay.

Sr. Nieto -- want to know how to drive your economy through the roof and so many jobs that Americans will be sneaking across the border to Mexico? Lower business and personal taxes and treat businesses fairly. With a US President who hates business and businessmen, you can easily capture some of the companies who are getting ready to flee to Europe. Forget factory workers at minimum wages -- you will get high paid and powered executives, techies, office headquarters. Tantalize them with the beautiful resorts and the smart people, and get ready to hire more people in your tax department.

But you have to act fast -- this opportunity is only going to last for another four years -- then somebody sane will be running the country and understand that businesses actually hire people, but by that time you'll have the business leaders sunning themselves in Cancun while their offices in Mexico City are pumping out Internet innovation.